Industry calls new rules government "overreach"

Iowa’s nursing home industry is opposing new regulations that it says will broaden the state's authority to investigate Medicaid fraud and abuse of the elderly.

Last month, the Iowa Department of Inspections and Appeals approved regulations that say the agency's Medicaid Fraud Control Unit can pursue abuse-and-neglect investigations without regard to whether certain victims are Medicaid beneficiaries.

One of the nursing home industry’s primary lobbyists, the Iowa Health Care Association, is objecting to that proposal, calling it an “overreach” and an unwarranted expansion of the unit’s authority.

Advocates for seniors disagree.

"Every Iowa family wants to be confident that a loved one in a nursing facility is safe, and not being neglected or taken advantage of," said John Hale, a consultant and advocate for Iowa seniors. “I believe that Iowans want and would value greater oversight from the Department of Inspections and Appeals to assure that.”

Dean Lerner, the former director of the inspections department, said he’s not surprised the industry’s trade association “would do everything within its power to prevent government oversight, of whatever nature, including oversight of abuse and neglect as well as fraud.”

Power over non-Medicaid providers?

Iowa and 48 other states have established a Medicaid Fraud Control Unit tasked with investigating allegations of Medicaid fraud and abuse or neglect within nursing homes and other care facilities.

Medicaid in Iowa provides services to 680,000 poor or disabled residents, more than a fifth of the state’s population.

Typically, substantiated cases of fraud, abuse and neglect referred to federal or state prosecutors for consideration of criminal charges. The unit also helps other agencies recover Medicaid payments to providers who have overbilled the taxpayer-funded program.

Officials with the Iowa Health Care Association did not respond to questions from the Des Moines Register, but in a letter to the inspections department, the association outlined its concerns with the new regulations, which remain subject to review by the Legislature’s Administrative Rules Committee.

For example, the proposed new regulations state the unit has the authority to investigate allegations of abuse and neglect not only at Medicaid-funded health care facilities but also non-Medicaid “board-and-care facilities” that house two or more people.

The association objects to that, saying “the Medicaid Fraud Control Unit’s investigative and punitive powers should not be expanded to non-Medicaid providers.”

However, the proposed state regulation mirrors federal rules that explicitly give all Medicaid Fraud Control Units the authority to investigate abuse and neglect regardless of whether it takes place in a Medicaid-funded nursing home or a board-and-care facility.

While investigations at Medicaid-funded homes are a required element of each unit’s mission, investigations at non-Medicaid facilities are left to the discretion of each state.

Will new regs expand definition of abuse?

The health care association also says the proposed regulations’ definition of a board-and-care facility — which is identical to the definition in federal rules — is “too broad.”

In its letter to the state, the association also argues that the proposed regulations should be changed to require fraud investigators to obtain a subpoena before they’re allowed to examine records related to non-Medicaid patients and care-facility residents.

The state says the unit’s authority to examine such records is clearly outlined in federal rules that treat each state’s fraud-control unit as a “health oversight agency” that is entitled to access those documents.

According to the Iowa Health Care Association, the new regulations take the additional step of expanding the definition of “neglect,” which the organization claims is “overly broad and expansive.”

State officials say that’s a misreading of the proposal, noting that it specifically defines abuse and neglect as any act that is already defined in state law as either abuse or neglect.

Dave Werning, spokesman for the inspections department, said the Iowa Legislature’s Administrative Rules Committee is expected to review the proposed regulations in early June.

The committee could delay implementation of the rules past June 13, when they are scheduled to take effect, or refer the matter to the full Legislature for its consideration.

Federal legislation would expand all fraud units' authority

Werning said the changes are intended to bring state regulations in line with longstanding federal rules.

Lerner said he’s not optimistic about the regulations being approved by the committee if industry lobbyists continue to oppose it.

He noted that the Iowa Health Care Association receives millions of Medicaid dollars through membership dues paid by nursing homes, despite its status as one of the most powerful lobbying organizations in Iowa.

“We'll see whose interests are being protected when the committee considers this,” Lerner said. “I'm not hopeful.”

At the federal level, legislation that would expand the authority of all the nation’s Medicaid Fraud Control Units has stalled in Congress.

A bill sponsored by Republican Rep. Tim Walberg of Michigan and Democrat Rep. Peter Welch of Vermont is languishing in a House subcommittee. It would allow fraud control units to pursue cases of Medicaid fraud and patient abuse beyond those involving health care facilities and board-and-care homes.

The National Association of Attorneys General says the fraud control units should be able to examine home health care, which is one of the fastest growing and least regulated segments of the health-care industry.